Socially responsible investing (SRI) is a type of investment strategy aiming to invest in companies aligned with the investor’s values. The SRI movement has been around for decades, but it has gained momentum recently as more investors and financial services company executives have come to realize the benefits of aligning their investments with their personal beliefs.
There are several reasons why socially aware companies can be attractive investment opportunities. Let’s explore some of the main reasons.
Reasons You Should Invest in Socially Aware Companies
The truth is, we’re all influenced by companies, whether consciously or unconsciously. So, as stockholders, investors, socially aware consumers, and supporters of “people over profits,” it’s wise to invest in socially conscious companies that practice sustainable business. Once you invest in socially aware companies, not only will your portfolio benefit financially, but your conscience will also.
1. You Want Your Money To Make An Impact. You’re Talking The Talk And Walking The Walk.
If upholding your principles is essential, socially responsible investing enables you to do just that. For example, if you hold strong beliefs about the environment or animal rights, SRI can help ensure your money goes toward companies that share those values.
2. You Want Transparency in Your Portfolio Holdings and Performance Data.
Socially responsible investing (SRI) funds and ETFs must disclose their quarterly holdings and often provide other information about their investment decisions and performance. You can see exactly what’s in your portfolio — including the social factors that influenced its selection. This helps you as an investor to make informed decisions about where you place your funds and avoid surprises down the line.
3. You Honour Ethical Businesses
When you invest in this type of business, you’re saying that you care about society and want your money to go towards companies that do good things for others. You also make it clear that you don’t want your money going into businesses that harm people or animals — or pollute the environment.
4. You Support Sustainable Innovations
Investing in socially aware companies is one of the best ways to support sustainable innovations because it helps fund their efforts to improve our planet. You can help them find new ways to solve problems by giving them access to capital (which is how they pay for things like research and development). And every time you invest money with them, it shows them that there’s demand for their products or services — which encourages them to keep innovating.
5. Social Responsibility Is Good Business
By providing better products and services, socially conscious businesses can attract more customers and increase profits over time. This means they’re less likely to go out of business than companies that don’t focus on sustainability or social responsibility.
If you’re looking for a business opportunity, investing in socially aware companies is one way to take a stand and make a difference. Whether you’re concerned about the planet’s fragility or want to support forward-thinking companies mindful of their peers and customers, socially aware businesses may be the answer.